Lorand posted the other day about the South Africa-Israel dispute over labelling of West Bank products. Sean Woolfrey of Tralac has more here:
On August 22, the South African Cabinet released a statement approving a Department of Trade Industry (DTI) notice requiring South African traders to refrain from labelling goods produced in “Occupied Palestinian Territory” (OPT) as Israeli products. Cabinet’s decision to approve the notice drew an angry response from the Israeli government, with Israel’s Foreign Ministry describing the move as being “without precedent” as constituting “blatant discrimination based on national and political distinction” and as potentially “fostering a general boycott”. South Africa’s ambassador to Israel was also summoned to Jerusalem to explain the South African government’s decision.
Much of the furore surrounding this decision has come from a misreading of the South Africa’s actions. First of all, the South African government is not seeking to ban or restrict goods from OPT, but simply to ensure that they are not misleadingly labelled. Indeed, when issuing the notice earlier this year the DTI stated that its aim was to ensure that South African consumers would be provided with accurate information regarding the origins of the goods they purchased. Secondly – and this is a point that seems to have been missed in many of the reports of South Africa’s actions – no requirement to label these goods as ‘Made in Palestine’ has been introduced.
The DTI notice, issued in terms of Section 24 of the Consumer Protection Act (No. 68 of 2008) requires “traders in South Africa, not to incorrectly label products that originate from the Occupied Palestinian Territory (OPT) as products of Israel”. In other words, the notice does not create an obligation to label OPT goods as ‘Made in Palestine’. Instead, it is simply seeking to ensure that such goods are not labelled ‘Made in Israel’. For the most part, these goods need not be labelled with their country of origin at all, as, apart from certain classes of goods, such as foodstuffs, foreign goods traded in South Africa are not required to bear a label stating their country or place of origin.
In the case of OPT products, however, WTO law does not apply as the goods in question are not products of Israel – or of any other WTO member for that matter, as Palestine is not a WTO member – and are therefore not covered by WTO law. As WTO agreements do not cover the goods of non-WTO member states, South Africa could treat OPT imports in any way it liked, by, for example, requiring ‘Made in Palestine’ labels or banning such imports outright, and it would still not be in contravention of its WTO obligations. It appears, therefore, that the precise requirements entailed in the DTI notice are: i) already required by existing South African legislation; ii) entirely consistent with the country’s WTO obligations; and iii) less restrictive than other measures which could be adopted by the South African government without contravening international law.
This is not the end of the story, however, as the government notice states that the “burden for proving” where products originate from “will lie with traders”. By contrast, the Consumer Protection Act requires only that persons do not “knowingly” mislead customers, and that retailers do not sell a product if they “reasonably could determine” that the label of that product is likely to mislead customers. The enforcement of the regulation regarding goods carrying a ‘Made in Israel’ label, and, in particular, the requirement that traders are responsible for determining the true origin of these goods – a requirement that is absent from the Consumer Protection Act and therefore would seem not to apply in the case of goods imported from other countries – could open South Africa up to the charge that this measure could result inde facto discrimination against products imported from Israel, a charge which could potentially lead to a WTO dispute.